Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
January 22, 2018
Date of Report
(Date of earliest event reported)
 
 
WSFS Financial Corporation
(Exact name of registrant as specified in its charter)
 
 
Delaware
  
001-35638
  
22-2866913
(State or other jurisdiction
of incorporation)
  
(SEC Commission
File Number)
  
(IRS Employer
Identification Number)
 
 
 
 
500 Delaware Avenue, Wilmington, Delaware
  
19801
(Address of principal executive offices)
  
(Zip Code)
Registrant’s telephone number, including area code: (302) 792-6000
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act






WSFS FINANCIAL CORPORATION
INFORMATION TO BE INCLUDED IN THE REPORT
Section 2 – Financial Information
Item 2.02 Results of Operation and Financial Condition
On January 22, 2018, the Registrant issued a press release to report earnings for the quarter and year ended December 31, 2017.  A copy of the press release is furnished with this Form 8-K as an exhibit.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
99    Press Release Dated January 22, 2018
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
 
 
WSFS FINANCIAL CORPORATION
 
 
 
Date:
January 23, 2018
By:
 
/s/ Dominic C. Canuso
 
 
 
 
Dominic C. Canuso
Executive Vice President and
Chief Financial Officer



Exhibit

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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
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EXHIBIT 99
 
 
 
FOR IMMEDIATE RELEASE
  
Investor Relations Contact: Dominic C. Canuso
 
  
(302) 571-6833
January 22, 2018
 
dcanuso@wsfsbank.com
 
  
Media Contact: Jimmy A. Hernandez
 
  
(302) 571-5254
 
 
jhernandez@wsfsbank.com

WSFS REPORTS 4Q 2017 AND FULL YEAR 2017 RESULTS;
11% INCREASE IN NET REVENUE OVER 4Q 2016 DRIVEN BY
OVER 10% ORGANIC GROWTH IN LOANS, DEPOSITS AND FEE INCOME, AND
CONTINUED IMPROVEMENTS IN NET INTEREST MARGIN;
RESULTS IMPACTED BY ACTIONS RELATED TO RECENT TAX LEGISLATION
WILMINGTON, Del.WSFS Financial Corporation (NASDAQ: WSFS), the parent company of WSFS Bank, reported a net loss of $0.5 million, or $0.02 per diluted common share for 4Q 2017 compared to net income of $18.1 million, or $0.56 per share for 4Q 2016 and net income of $20.6 million, or $0.64 per share for 3Q 2017. Net income for the year ended December 31, 2017 was $59.6 million, or $1.84 per diluted common share as compared to $64.1 million, or $2.06 per share for 2016. The results for 4Q 2017 and full-year 2017 include $23.6 million of after-tax expense related to the four items disclosed in the Company’s press release and Form 8-K dated January 4, 2018. See Notable Items for further information.
Net revenue (which includes net interest income and noninterest income) was $90.2 million for 4Q 2017, an increase of $8.9 million, or 11% from 4Q 2016. The strong increase in net revenue includes balanced organic growth in both net interest income and noninterest income. Net interest income was $57.7 million, an increase of $4.8 million, or 9% from 4Q 2016; and fee income (noninterest income) was $32.4 million, an increase of $4.1 million, or 15% from 4Q 2016. Noninterest expenses were $56.1 million in 4Q 2017, an increase of $7.1 million, or 15% from 4Q 2016.
For 4Q 2017, return on assets (ROA) was (0.03)%, return on average tangible common equity (ROTCE) was (0.05)% and the efficiency ratio was 61.7%. For the full-year 2017, ROA was 0.87%, ROTCE was 11.48% and the efficiency ratio was 61.5%.




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
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Highlights for 4Q 2017: 
Core earnings per share (EPS)(1) of $0.71 for 4Q 2017 increased 22% from $0.58 in 4Q 2016.
Core ROA(1) was 1.31% for 4Q 2017 compared to 1.12% for 4Q 2016. Core return on average tangible common equity(1) was 16.46% for 4Q 2017 compared to 15.39% for 4Q 2016.
Core net revenue(1) of $89.9 million increased $9.2 million, or 11% from 4Q 2016, reflecting strong organic growth, including a $4.8 million, or 9% increase in core net interest income(1) and a $4.4 million, or 16% increase in core fee income (noninterest income)(1) across several business lines.
Core noninterest expense(1) increased $4.3 million, or 9% from 4Q 2016, creating 2 percentage points of positive operating leverage and resulting in a strong core efficiency ratio(1) of 57.0%.
Loans grew 10% (annualized), customer funding increased 12% (annualized), and the net interest margin grew 5 basis points to 4.00% compared to 3Q 2017. Compared to 4Q 2016, loans grew 7%, customer funding increased 9%, and the net interest margin grew 10 basis points to 4.00%. These healthy growth rates demonstrate our ability to simultaneously increase market share in a competitive environment, while also expanding our geographic footprint and growing our gross margins and profitability.























(1) As used in this release, core earnings per share (EPS), core return on average assets (ROA), core net revenue, core net interest income, core fee income (noninterest income), core noninterest expense and core efficiency ratio are non-GAAP financial measures. For a reconciliation of these measures to their comparable GAAP measures, see pages 21 and 22 of this press release.




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500 Delaware Avenue, Wilmington, Delaware 19801
  
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Notable items in the quarter:
All of the items below are excluded from core earnings. The first four items listed below are described in greater detail in our press release and Form 8-K dated January 4, 2018.
WSFS recorded a $12.8 million income tax charge, or $0.40 per share, in 4Q 2017 upon revaluing the Company’s deferred tax asset (DTA) at December 31, 2017 as a result of the reduction of the top corporate income tax rate from 35% to 21%, effective January 1, 2018, included in H.R. 1 (the Tax Cuts and Jobs Act of 2017). The Company expects to recover this charge through lower taxes in less than one year.
WSFS recognized an $8.0 million income tax charge, or $0.25 per share, in 4Q 2017 from the decision in 4Q 2017 to surrender all of its Bank-Owned Life Insurance (BOLI) policies. Due to the change in the corporate tax rate, the returns on these very long-term assets are no longer accretive to our current ROA performance and expectations. We expect to redeploy the estimated $101 million of cash proceeds upon formal surrender of the policies, which is expected to occur in 2018.
WSFS realized a $2.8 million fraud loss expense, or $0.06 per share, in 4Q 2017 resulting from a scheme to defraud the bank that was previously disclosed on Form 8-K on June 22, 2017. WSFS is aggressively pursuing all available remedies, including working with insurance carriers, to recover the loss.
WSFS made a $1.5 million donation, or $0.03 per share, to the WSFS Foundation, matching the only other grant made to the WSFS Foundation when it was formed in 2003.
WSFS realized $0.2 million, or less than $0.01 per share, in net gains on sales of securities in 4Q 2017, compared to $0.5 million, or $0.01 per share, in 4Q 2016.
WSFS recorded less than $0.1 million, or less than $0.01 per share, in corporate development expenses during 4Q 2017, compared to $1.5 million or approximately $0.03 per share, in 4Q 2016.






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500 Delaware Avenue, Wilmington, Delaware 19801
  
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CEO outlook and commentary
Mark A. Turner, President and CEO, said, “Our fourth quarter results were impacted by previously announced actions resulting from the Tax Cuts and Jobs Act of 2017 and other discrete items. Excluding these items, we recorded strong fourth quarter core results, which cap a successful year. For the quarter, we recorded core EPS of $0.71 and core ROA of 1.31%, which represent significant improvement from the prior year. We gained meaningful market share during the fourth quarter as loans grew an impressive 10% and customer deposits increased 12% on an annualized basis. Execution and optimization of previous acquisitions was a strategic focus in 2017, and we are pleased to report a strong 4Q 2017 core efficiency ratio of 57.0% and 2 percentage points of positive operating leverage compared to 4Q 2016. Our 4Q 2017 core results were balanced and almost entirely driven by organic growth, confirming the strength of our business model and growth strategy. Our full-year 2017 results were highlighted by 17% growth in core EPS, a core ROA of 1.21%, 7% loan growth, 9% customer funding growth, core fee income growth of 19%, and a 60.1% core efficiency ratio. These core results and the resulting momentum position us well to exceed our Strategic Plan goals in 2018, even before the favorable impact of the recent tax rate change.
“Further, the results of our 2017 Associate engagement survey conducted by the Gallup organization placed us among the top 5% of Gallup clients worldwide. During the year, we also were named a top workplace in Delaware for the twelfth consecutive year in The News Journal’s ‘Top Workplaces’ survey, ranking second in the large company category. We were also named the ‘Top Bank’ in Delaware for the seventh year in a row.  In addition, we were named a ‘Top Workplace’ in our newer, greater-Philadelphia market by philly.com, earning third place in the mid-size company category.
“Strong Associate and Customer engagement across our footprint coupled with high performing, high quality, and sustainable financial results, continue to fuel our growth and ability to execute on our strategic goals. These results and accolades demonstrate the continued success of our focused strategy of: ‘Engaged Associates delivering stellar experiences growing Customer Advocates and value for our Owners’.”












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Fourth Quarter 2017 Discussion of Financial Results
Net interest margin increased due to balance sheet positioning and growth
Net interest income for 4Q 2017 was $57.7 million, an increase of $4.8 million, or 9% compared to 4Q 2016. The net interest margin for 4Q 2017 was 4.00%, an increase of 10 bps from 3.90% for 4Q 2016. The year-over-year increase reflects an estimated 9 bps resulting from the higher short-term interest rate environment, 6 bps related to the redemption of $55.0 million of our senior notes in late 3Q 2017, an estimated 6 bps from favorable balance sheet growth and mix, and 3 bps from the payoff of a loan previously placed on nonaccrual status. These drivers of higher net interest margin were offset somewhat by 11 bps attributable to lower purchased loan accretion from previous acquisitions and 3 bps from the continued run-off of our high-yielding reverse mortgage portfolio.
Compared with 3Q 2017, net interest income increased $1.6 million or 3% (not annualized) and net interest margin increased 5 bps to 4.00% from 3.95%. The increase in the net interest margin from 3Q 2017 was primarily driven by a 4 bps benefit from the aforementioned redemption of $55.0 million of our senior notes in 3Q 2017 and a 3 bps benefit from the loan payoff described in the paragraph above. These factors were offset by 3 bps of lower purchased loan accretion in 4Q 2017.
Strong and balanced loan portfolio growth continues
At December 31, 2017, WSFS’ net loan portfolio was $4.81 billion, an increase of $117.8 million, or 10% (annualized), from September 30, 2017. The increase was highlighted by a $76.8 million, or 8% (annualized), increase in total commercial loans and a $37.7 million, or 29% (annualized), increase in consumer loans.
Compared to December 31, 2016, net loans increased $308.2 million, or 7%. The year-over-year growth included an increase of $176.5 million, or 7% in commercial and industrial (C&I) loans, an increase of $58.7 million, or 27% in construction loans and an increase of $109.6 million, or 24% in consumer loans. These increases were partially offset by a decline in residential mortgages of $59.6 million, or 17%, reflecting our ongoing strategy of selling most newly-originated residential mortgages in the secondary market.




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
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The following table summarizes loan balances and composition at December 31, 2017 compared to September 30, 2017 and December 31, 2016:
(Dollars in thousands)
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
Commercial & industrial
 
$
2,540,853

 
52
 %
 
$
2,483,193

 
53
 %
 
$
2,364,399

 
53
 %
Commercial real estate
 
1,180,399

 
25

 
1,149,664

 
25

 
1,156,542

 
26

Construction
 
280,017

 
6

 
291,617

 
6

 
221,321

 
5

Total commercial loans
 
4,001,269

 
83

 
3,924,474

 
84

 
3,742,262

 
84

Residential mortgage
 
284,798

 
6

 
281,092

 
6

 
344,373

 
7

Consumer
 
561,905

 
12

 
524,164

 
11

 
452,273

 
10

Allowance for loan losses
 
(40,599
)
 
(1
)
 
(40,201
)
 
(1
)
 
(39,751
)
 
(1
)
Net Loans
 
$
4,807,373

 
100
 %
 
$
4,689,529

 
100
 %
 
$
4,499,157

 
100
 %
Credit quality trends remain stable and strong

Credit quality metrics during 4Q 2017 reflect continued strength in portfolio performance.
Total problem assets, which includes all criticized, classified, and nonperforming loans as well as other real estate owned (OREO), were $150.3 million, or 21.34% of Tier 1 capital plus the allowance for loan losses (ALLL) at December 31, 2017, a slight increase compared to $147.7 million, or 20.63%, at September 30, 2017. Notably, classified assets, which are included in problem assets, decreased to $110.7 million at December 31, 2017 compared to $128.7 million at September 30, 2017.
Total delinquencies, which include nonperforming delinquencies, were $25.3 million at December 31, 2017, or 0.53% of gross loans, a slight improvement from $27.0 million and 0.57% of gross loans at September 30, 2017. Excluding nonperforming delinquencies, performing loan delinquencies were only 0.18% of gross loans at December 31, 2017.
Total nonperforming assets increased $6.6 million or 13% to $59.0 million at December 31, 2017, as compared to $52.4 million at September 30, 2017, primarily due to one loan relationship that was placed on non-accrual status during the quarter. The nonperforming assets to total assets ratio was a low 0.84% at December 31, 2017 compared to 0.76% at September 30, 2017.
Net charge-offs for 4Q 2017 were $3.7 million or 0.31% (annualized), an increase from $2.7 million, or 0.23% (annualized), in 3Q 2017, and a decrease from $4.4 million, or 0.40% (annualized), during 4Q 2016. For the full-year 2017, the ratio of net charge-offs to total gross loans was 0.22% in 2017, as compared with 0.23% for the full-year 2016, demonstrating continued overall positive and stable credit quality trends.




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Total credit costs (provision for loan losses, loan workout expenses, OREO expenses and other credit costs) were $4.1 million for 4Q 2017, an increase from $3.5 million during 3Q 2017 and a decrease from $5.9 million during 4Q 2016. Total credit costs for the full-year 2017 were $12.6 million, as compared with $14.8 million for the full-year 2016, further demonstrating continued positive and stable credit quality and costs.
The ratio of the ALLL to total gross loans was 0.84% at December 31, 2017 compared to 0.86% at September 30, 2017. Excluding the balances for acquired loans (marked-to-market at acquisition), the ALLL to total gross loans ratio would have been 0.97% at December 31, 2017 and 0.99% at September 30, 2017. The ALLL was 111% of nonaccruing loans at December 31, 2017 compared to 120% at September 30, 2017 and 174% at December 31, 2016.
 
Customer funding reflects continued core deposit strength
Total customer funding was $5.02 billion at December 31, 2017, a $140.4 million, or 12% (annualized) increase from September 30, 2017. The increase included a $63.2 million increase in noninterest bearing deposits, reflecting strong organic growth in our core deposit franchise. In addition, the Company took the opportunity to attract fixed rate funding during the quarter in a rising rate environment. As a result, CDs increased $71.9 million in the quarter.
Customer funding increased $418.6 million, or 9% compared to December 31, 2016. This included a core deposit increase of $382.7 million, or 10% over the prior year, with $290.6 million attributable to no- and low-cost checking deposit accounts.
Core deposits were a very strong 87% of total customer deposits, and no- and low-cost checking deposit accounts represent a robust 49% of total customer deposits at December 31, 2017. These core deposits predominantly represent longer-term, less price-sensitive customer relationships, which are very valuable in a rising-rate environment. The ratio of loans to customer deposits was 96% at December 31, 2017.




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
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The following table summarizes customer funding balances and composition at December 31, 2017 compared to September 30, 2017 and December 31, 2016:
(Dollars in thousands)
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
Noninterest demand
 
$
1,420,760

 
28
%
 
$
1,357,597

 
28
%
 
$
1,266,306

 
28
%
Interest-bearing demand
 
1,071,512

 
21

 
1,057,571

 
22

 
935,333

 
20

Savings
 
549,744

 
11

 
557,914

 
11

 
547,293

 
12

Money market
 
1,347,146

 
27

 
1,347,576

 
28

 
1,257,520

 
27

Total core deposits
 
4,389,162

 
87

 
4,320,658

 
89

 
4,006,452

 
87

Customer time deposits
 
629,071

 
13

 
557,129

 
11

 
593,184

 
13

Total customer deposits
 
$
5,018,233

 
100
%
 
$
4,877,787

 
100
%
 
$
4,599,636

 
100
%

Strong and diversified organic fee income growth
Core fee income (noninterest income) increased by $4.4 million, or 16%, to $32.2 million compared to 4Q 2016, including $4.1 million, or 15%, from organic growth, demonstrating our ability to execute on our strategic goal of optimizing our fee-based businesses. This was the result of diversified growth across most of our businesses and included $1.7 million from credit/debit card and ATM income and $1.3 million from investment management and fiduciary revenue.
When compared to 3Q 2017, core fee income increased $0.5 million, or 2% (not annualized), driven by a $0.6 million increase in investment management and fiduciary revenue. Further, full-year 2017 core fee income increased $20.0 million over 2016, or 19%, of which $12.3 million, or 12% was organic growth.
For 4Q 2017, fee income was 35.7% of total revenue (computed on a fully tax-equivalent basis), compared to 34.5% for 4Q 2016, and was well diversified among various sources, including traditional banking, mortgage banking, wealth management and ATM services (Cash Connect®).




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Noninterest expenses reflect improved efficiency
Core noninterest expense for 4Q 2017 was $51.7 million, an increase of $4.3 million or 9% from $47.4 million in 4Q 2016. Contributing to the year-over-year increase was $3.4 million of higher compensation and benefit costs to support overall franchise growth and $0.4 million due to higher costs to support Cash Connect® revenue growth.
When compared to 3Q 2017, core noninterest expense decreased $1.6 million, primarily due to $1.0 million of lower incentive compensation costs and $0.3 million related to a vendor credit.
Our core efficiency ratio was 57.0% in 4Q 2017, an improvement compared to 60.2% in 3Q 2017 and 58.2% in 4Q 2016. This improvement reflects continued growth and economies of scale as well as the typical seasonality of our business, with results typically improving throughout the year. Our full-year 2017 core efficiency ratio was 60.1% in 2017, slightly improved from 60.2% in 2016.


















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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
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Income taxes
Our income tax provision and effective tax rate were significantly affected by the revaluation of our net DTA due to the permanent reduction in the corporate tax rate included in H.R. 1 (the Tax Cuts and Jobs Act) as well as our related decision to surrender our BOLI policies in 2018. The table below shows the effect of these items on our tax provision and effective tax rate.
 
 
Three months ended
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
Tax provision
 
$
30,557

 
$
10,942

 
$
9,070

Less: DTA revaluation
 
(12,820
)
 

 

Less: BOLI surrender
 
(7,952
)
 

 

Adjusted tax provision(2)
 
$
9,785

 
$
10,942

 
$
9,070

 
 
 
 
 
 
 
Effective tax rate
 
101.7
 %
 
34.7
%
 
33.4
%
Less: Effect of DTA revaluation
 
(42.7
)
 

 

Less: Effect of BOLI surrender
 
(26.4
)
 

 

Adjusted effective tax rate(2)
 
32.6
 %
 
34.7
%
 
33.4
%
The modest fluctuation in the adjusted effective tax rate (excluding the effects of our DTA revaluation and BOLI surrender) is primarily the result of differences in tax benefits realized on stock-based compensation and state taxes.











(2) As used in this release, adjusted tax provision and adjusted effective tax rate are non-GAAP financial measures. For further discussion of our use of non-GAAP financial information, please see note (o) on page 21 of this press release.




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Selected Business Segments (included in previous results):

Wealth Management segment fee revenue grew 16% over the prior year
The Wealth Management segment provides a broad array of fiduciary, investment management, credit and deposit products to clients through six businesses. WSFS Wealth Investments provides insurance, asset management, and brokerage products primarily to our retail banking clients with $188.7 million in assets under management (AUM). Cypress Capital Management, LLC is a registered investment adviser with $901.5 million(3) in AUM. Cypress is a fee-only wealth management firm whose primary market segment is high net worth individuals, offering a “balanced” investment style focused on preservation of capital and providing current income. West Capital Management is a registered investment adviser with $861.2 million in AUM. West Capital is a fee-only wealth management firm which operates under a multi-family office philosophy and provides fully-customized solutions tailored to the unique needs of institutions and high net worth individuals. Christiana Trust, with $16.79 billion(3) in AUM and assets under administration, provides fiduciary and investment services to personal trust clients; and trustee, agency, bankruptcy, administration, custodial and commercial domicile services to corporate and institutional clients. Powdermill Financial Solutions, LLC is a multi-family office that specializes in providing unique, independent solutions to high net worth individuals, families and corporate executives through a coordinated, centralized approach. WSFS Wealth Client Management serves high net worth clients by delivering credit and deposit products and partnering with other business units to deliver investment management and fiduciary products and services.
Total Wealth Management revenue (net interest income, fiduciary fees and other fee income) was $13.2 million for 4Q 2017. This represented an increase of $1.6 million, or 14% compared to 4Q 2016 and an increase of $0.6 million, or 5% compared to 3Q 2017. Included in the year-over-year increase is fee revenue, which increased $1.4 million, or 16%, compared to 4Q 2016. The year over year increase reflects continued organic growth across our business lines.
Total noninterest expense (including intercompany allocations and provision for loan losses and credit costs) was $8.4 million during 4Q 2017 compared to $10.7 million during 4Q 2016 and $8.6 million during 3Q 2017. The year-over-year decrease in costs was due to a 2016 charge-off of $3.5 million in the Wealth Division’s Wealth Client Management Group. Excluding this, noninterest expense increased $1.2 million or 17% due to higher legal and consulting costs related to certain legacy trust legal matters, increased compensation expense due to higher revenue and other infrastructure costs necessary to support the continuing growth of the business.
Pre-tax income in 4Q 2017 was $4.9 million compared to $0.9 million in 4Q 2016 and $4.1 million in 3Q 2017 and was driven by the above mentioned factors.

(3) AUM includes $146.9 million of Christiana Trust assets for which Cypress serves as sub-adviser.




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Cash Connect® net revenue increases 10% over same quarter 2016
Cash Connect® is a premier provider of ATM vault cash and smart safe and cash logistics services in the United States. Cash Connect® services over 23,000 non-bank ATMs and retail safes nationwide with over $970 million in cash and other fee-based services. Cash Connect® also operates 440 ATMs for WSFS Bank, which has the largest branded ATM network in Delaware.
Our Cash Connect® division recorded $9.5 million in net revenue (fee income less funding costs) in 4Q 2017, an increase of $0.9 million or 10% from 4Q 2016, primarily due to continued growth in the bailment, cash management and smart safe lines of business, partially offset by higher funding costs. Compared to 3Q 2017, net revenue decreased $0.1 million. Noninterest expense (including intercompany allocations of expense) was $7.5 million during 4Q 2017, an increase of $1.2 million from 4Q 2016 and a decrease of $0.1 million compared to 3Q 2017. The year-over-year increase in expense was primarily due to higher operating and funding costs associated with growth, including higher partner costs, and investment in several new features of our managed services and smart safe products. Cash Connect® reported pre-tax income of $1.9 million for 4Q 2017, which was a decrease of $0.3 million from 4Q 2016, primarily as a result of margin compression from rising interest rates. Pre-tax net income was essentially flat in 4Q 2017 compared to 3Q 2017.
Throughout 2017, Cash Connect® focused on expanding both ATM and smart safe managed services to offset margin compression resulting from the ATM industry consolidation trend and higher interest rate expense pressure. Cash Connect® is committed to improving funding costs and ROA by optimizing cash usage throughout our network. Cash Connect® almost doubled our smart safe network to nearly 1,600 safes as of year-end 2017, an increase from approximately 800 safes at the end of 2016 and 100 safes at the end of 2015. Additionally, Cash Connect® has a strong smart safe pipeline generated by several national channel partners actively marketing our program.





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Capital management
WSFS’ total stockholders’ equity decreased $7.2 million, or 1% (not annualized), to $733.7 million at December 31, 2017 from $740.9 million at September 30, 2017, primarily due to the small quarterly loss, stock buybacks and the payment of the common stock dividend during the quarter.
WSFS’ tangible common equity(4)decreased by 1% (not annualized) to $545.2 million at December 31, 2017 from $551.7 million at September 30, 2017 for the reasons described in the paragraph above.
WSFS’ common equity to assets ratio was 10.49% at December 31, 2017, and its tangible common equity to tangible assets ratio(4) decreased by 24 bps during the quarter to 8.01%. At December 31, 2017, book value per share was $23.35, a $0.24 decrease from September 30, 2017, and tangible common book value per share(4) was $17.35, a $0.22 decrease from September 30, 2017.
At December 31, 2017, WSFS Bank’s Tier 1 leverage ratio of 9.87%, Common Equity Tier 1 capital ratio and Tier 1 capital ratio of 11.53%, and Total Capital ratio of 12.25%, were all substantially in excess of the “well-capitalized” regulatory benchmarks.(5)  
In 4Q 2017, WSFS repurchased 51,000 shares of common stock at an average price of $49.76 as part of our 5% buyback program approved by the Board of Directors in 4Q 2015. WSFS has 699,194 shares, or more than 2% of outstanding shares, remaining to repurchase under this current authorization. In addition, the Board of Directors approved a quarterly cash dividend of $0.09 per share of common stock. This dividend will be paid on February 22, 2018 to stockholders of record as of February 8, 2018.







(4) As used in this release, tangible common equity, tangible common equity to assets and tangible common book value per share are non-GAAP financial measures. For a reconciliation of these measures to their comparable GAAP measures, see pages 21 and 22 of this press release.

(5) These ratios are calculated in accordance with guidance included in the Interagency Statement on Accounting and Reporting Implications of the New Tax Law which was issued on January 18, 2018.




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
14


Fourth quarter 2017 earnings release conference call
Management will conduct a conference call to review 4Q 2017 results at 1:00 p.m. Eastern Time (ET) on Tuesday, January 23, 2018. Interested parties may listen to this call by dialing 1-877-312-5857. A rebroadcast of the conference call will be available beginning at 4 pm on January 23, 2018 until Tuesday, February 6, 2018 at 4 pm. by dialing 1-855-859-2056 and using Conference ID #7077949.
About WSFS Financial Corporation
WSFS Financial Corporation is a multi-billion dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest and largest locally-managed bank and trust company headquartered in Delaware and the Delaware Valley. As of December 31, 2017, WSFS Financial Corporation had $7.0 billion in assets on its balance sheet and $18.6 billion in assets under management and administration. WSFS operates from 76 offices located in Delaware (46), Pennsylvania (28), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking, cash management and trust and wealth management. Other subsidiaries or divisions include Christiana Trust, WSFS Wealth Investments, Cypress Capital Management, LLC, West Capital Management, Powdermill Financial Solutions, Cash Connect®, WSFS Mortgage and Arrow Land Transfer. Serving the Delaware Valley since 1832, WSFS Bank is one of the ten oldest banks in the United States continuously operating under the same name. For more information, please visit wsfsbank.com.





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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
15


Forward-Looking Statement Disclaimer

This press release contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and management's outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company's control) and are subject to risks and uncertainties (which change over time) and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to, those related to difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which the Company operates and in which its loans are concentrated, including the effects of declines in housing markets, an increase in unemployment levels and slowdowns in economic growth; the Company's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates which may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of the Company's investment securities portfolio; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial and industrial loans in our loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of the Company's operations including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; possible additional loan losses and impairment of the collectability of loans; the Company's ability to comply with applicable capital and liquidity requirements (including the finalized Basel III capital standards), including our ability to generate liquidity internally or raise capital on favorable terms; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations; any impairment of the Company's goodwill or other intangible assets; failure of the financial and operational controls of the Company's Cash Connect® division; conditions in the financial markets that may limit the Company's access to additional funding to meet its liquidity needs; the success of the Company's growth plans, including the successful integration of past and future acquisitions; negative perceptions or publicity with respect to the Company's trust and wealth management business; system failure or cybersecurity breaches of the Company's network security; the Company's ability to recruit and retain key employees; the effects of problems encountered by other financial institutions that adversely affect the Company or the banking industry generally; the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and manmade disasters including terrorist attacks; possible changes in the speed of loan prepayments by the Company's customers and loan origination or sales volumes; possible acceleration of prepayments of mortgage-backed securities due to low interest rates, and the related acceleration of premium amortization on prepayments on mortgage-backed securities due to low interest rates; regulatory limits on the Company's ability to receive dividends from its subsidiaries and pay dividends to its stockholders; the effects of any reputational, credit, interest rate, market, operational, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above; and the costs associated with resolving any problem loans, litigation and other risks and uncertainties, discussed in the Company's Form 10-K for the year ended December 31, 2016 and other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements are as of the date they are made, and the Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.





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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
16


WSFS FINANCIAL CORPORATION     
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
 
Three months ended
 
Twelve months ended
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
December 31, 2017
 
December 31, 2016
Interest income:
Interest and fees on loans
 
$
59,889

 
$
58,504

 
$
53,951

 
$
229,147

 
$
194,345

Interest on mortgage-backed securities
 
5,176

 
4,955

 
4,096

 
19,308

 
15,754

Interest and dividends on investment securities
 
1,124

 
1,139

 
1,212

 
4,648

 
4,872

Other interest income
 
367

 
412

 
433

 
1,623

 
1,607

 
 
66,556

 
65,010

 
59,692

 
254,726

 
216,578

Interest expense:
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
4,626

 
3,862

 
2,687

 
14,904

 
9,421

Interest on Federal Home Loan Bank advances
 
2,206

 
2,402

 
1,310

 
8,263

 
4,707

Interest on senior debt
 
1,179

 
1,807

 
2,120

 
7,228

 
6,356

Interest on trust preferred borrowings
 
522

 
500

 
439

 
1,940

 
1,622

Interest on other borrowings
 
298

 
310

 
182

 
1,120

 
727

 
 
8,831

 
8,881

 
6,738

 
33,455

 
22,833

Net interest income
 
57,725

 
56,129

 
52,954

 
221,271

 
193,745

Provision for loan losses
 
4,063

 
2,896

 
5,124

 
10,964

 
12,986

Net interest income after provision for loan losses
 
53,662

 
53,233

 
47,830

 
210,307

 
180,759

 
 
 
 
 
 
 
 
 
 
 
Noninterest income:
 
 
 
 
 
 
 
 
 
 
Credit/debit card and ATM income
 
9,710

 
9,350

 
7,969

 
36,116

 
29,899

Investment management and fiduciary revenue
 
9,420

 
8,809

 
8,081

 
35,103

 
25,691

Deposit service charges
 
4,666

 
4,695

 
4,634

 
18,318

 
17,734

Mortgage banking activities, net
 
1,508

 
1,756

 
1,409

 
6,293

 
7,434

Loan fee income
 
735

 
483

 
567

 
2,218

 
2,066

Investment securities gains, net
 
220

 
736

 
479

 
1,984

 
2,369

Bank-owned life insurance income
 
421

 
546

 
222

 
1,545

 
919

Other income
 
5,755

 
6,066

 
4,938

 
23,067

 
18,949

 
 
32,435

 
32,441

 
28,299

 
124,644

 
105,061

Noninterest expense:
 
 
 
 
 
 
 
 
 
 
Salaries, benefits and other compensation
 
28,145

 
29,172

 
24,794

 
114,376

 
95,983

Occupancy expense
 
4,807

 
4,756

 
4,086

 
19,409

 
16,646

Equipment expense
 
3,020

 
2,922

 
2,726

 
12,564

 
10,368

Professional fees
 
2,045

 
2,248

 
2,251

 
8,597

 
9,142

Data processing and operations expense
 
1,594

 
1,817

 
1,711

 
6,779

 
6,275

Marketing expense
 
815

 
712

 
843

 
3,083

 
3,020

FDIC expenses
 
533

 
560

 
526

 
2,216

 
2,606

Loan workout and OREO expense
 
316

 
484

 
622

 
1,820

 
1,681

Early extinguishment of debt
 

 
695

 

 
695

 

Corporate development expense
 
21

 
153

 
1,526

 
878

 
8,529

Fraud loss
 
2,844

 

 

 
2,844

 

Other operating expenses
 
11,925

 
10,644

 
9,864

 
41,200

 
34,416

 
 
56,065

 
54,163

 
48,949

 
214,461

 
188,666

Income before taxes
 
30,032

 
31,511

 
27,180

 
120,490

 
97,154

Income tax provision
 
30,557

 
10,942

 
9,070

 
60,939

 
33,074

Net (loss) income
 
$
(525
)
 
$
20,569

 
$
18,110

 
$
59,551

 
$
64,080

Diluted (loss) earnings per share of common stock:
 
$
(0.02
)
 
$
0.64

 
$
0.56

 
$
1.84

 
$
2.06

Weighted average shares of common stock outstanding for fully diluted EPS (q)
 
31,404,353

 
32,268,538

 
32,280,897

 
32,302,540

 
31,085,693

See “Notes”




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
17


WSFS FINANCIAL CORPORATION     
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited) - continued
 
 
Three months ended
 
Twelve months ended
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
December 31, 2017
 
December 31, 2016
Performance Ratios:
 
 
 
 
 
 
 
 
 
 
Return on average assets (a)
 
(0.03
)%
 
1.20
%
 
1.08
%
 
0.87
%
 
1.06
%
Return on average equity (a)
 
(0.28
)
 
11.06

 
10.37

 
8.21

 
10.03

Return on average tangible common equity (a)(o)
 
(0.05
)
 
15.22

 
14.82

 
11.48

 
12.85

Net interest margin (a)(b)
 
4.00

 
3.95

 
3.90

 
3.95

 
3.88

Efficiency ratio (c)
 
61.67

 
60.61

 
59.71

 
61.47

 
62.73

Noninterest income as a percentage of total net revenue (b)
 
35.68

 
36.30

 
34.52

 
35.72

 
34.93

See “Notes”





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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
18


WSFS FINANCIAL CORPORATION     
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENTS OF FINANCIAL CONDITION  (Unaudited)
(Dollars in thousands)
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
Assets:
 
 
 
 
 
 
Cash and due from banks
 
$
122,141

 
$
117,343

 
$
119,929

Cash in non-owned ATMs
 
598,117

 
612,443

 
698,454

Investment securities (d)
 
161,809

 
162,345

 
199,979

Other investments
 
34,892

 
36,856

 
41,788

Mortgage-backed securities (d)
 
837,499

 
809,809

 
758,910

Net loans (e)(f)(l)
 
4,807,373

 
4,689,529

 
4,499,157

Bank owned life insurance
 
102,958

 
102,727

 
101,425

Goodwill and intangibles
 
188,444

 
189,116

 
191,247

Other assets
 
143,787

 
155,176

 
154,381

Total assets
 
$
6,997,020

 
$
6,875,344

 
$
6,765,270

Liabilities and Stockholders’ Equity:
 
 
 
 
 
 
Noninterest-bearing deposits
 
$
1,420,760

 
$
1,357,597

 
$
1,266,306

Interest-bearing deposits
 
3,597,473

 
3,520,190

 
3,333,330

Total customer deposits
 
5,018,233

 
4,877,787

 
4,599,636

Brokered deposits
 
229,371

 
173,932

 
138,802

Total deposits
 
5,247,604

 
5,051,719

 
4,738,438

Federal Home Loan Bank advances
 
710,001

 
697,812

 
854,236

Other borrowings
 
227,805

 
305,496

 
413,211

Other liabilities
 
77,958

 
79,456

 
72,049

Total liabilities
 
6,263,368

 
6,134,483

 
6,077,934

Stockholders’ equity
 
733,652

 
740,861

 
687,336

Total liabilities and stockholders’ equity
 
$
6,997,020

 
$
6,875,344

 
$
6,765,270

Capital Ratios:
 
 
 
 
 
 
Equity to asset ratio
 
10.49
%
 
10.78
%
 
10.16
%
Tangible common equity to tangible asset ratio (o)
 
8.01

 
8.25

 
7.55

Common equity Tier 1 capital (g) (required: 4.5%; well capitalized: 6.5%) (p)
 
11.53

 
11.52

 
11.19

Tier 1 leverage (g) (required: 4.00%; well-capitalized: 5.00%) (p)
 
9.87

 
10.24

 
9.66

Tier 1 risk-based capital (g) (required: 6.00%; well-capitalized: 8.00%) (p)
 
11.53

 
11.52

 
11.19

Total Risk-based capital (g) (required: 8.00%; well-capitalized: 10.00%) (p)
 
12.25

 
12.22

 
11.93

Asset Quality Indicators:
 
 
 
 
 
 
Nonperforming Assets:
 
 
 
 
 
 
Nonaccruing loans
 
$
36,436

 
$
33,536

 
$
22,876

Troubled debt restructuring (accruing)
 
20,061

 
14,905

 
14,336

Assets acquired through foreclosure
 
2,503

 
3,924

 
3,591

Total nonperforming assets
 
$
59,000

 
$
52,365

 
$
40,803

Past due loans (h)
 
$
461

 
$
1,338

 
$
438

Allowance for loan losses
 
40,599

 
40,201

 
39,751

Ratio of nonperforming assets to total assets
 
0.84
%
 
0.76
%
 
0.60
%
Ratio of nonperforming assets (excluding accruing TDRs) to total assets
 
0.56

 
0.54

 
0.39

Ratio of allowance for loan losses to total gross loans (i)(n)
 
0.84

 
0.86

 
0.89

Ratio of allowance for loan losses to nonaccruing loans
 
111

 
120

 
174

Ratio of quarterly net charge-offs to average gross loans (a)(e)(i)(n)
 
0.31

 
0.23

 
0.40

Ratio of year-to-date net charge-offs to average gross loans (a)(e)(i)(n)
 
0.22

 
0.19

 
0.23





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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
19


WSFS FINANCIAL CORPORATION    
FINANCIAL HIGHLIGHTS (Continued) 
AVERAGE BALANCE SHEET (Unaudited)
(Dollars in thousands)
 
Three months ended
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
 
Average
Balance
 
Interest &
Dividends
 
Yield/
Rate
(a)(b)
 
Average
Balance
 
Interest &
Dividends
 
Yield/
Rate
(a)(b)
 
Average
Balance
 
Interest &
Dividends
 
Yield/
Rate
(a)(b)
Assets:
Interest-earning assets:
Loans: (e) (j)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate loans
 
$
1,469,316

 
$
18,713

 
5.05
%
 
$
1,422,306

 
$
18,186

 
5.07
%
 
$
1,354,359

 
$
17,004

 
4.99
%
Residential real estate loans
 
258,900

 
3,714

 
5.74

 
269,134

 
3,747

 
5.57

 
288,281

 
4,687

 
6.50

Commercial loans
 
2,497,730

 
30,575

 
4.89

 
2,471,382

 
30,013

 
4.85

 
2,328,245

 
26,789

 
4.61

Consumer loans
 
543,569

 
6,700

 
4.89

 
509,750

 
6,329

 
4.93

 
448,709

 
4,988

 
4.42

Loans held for sale
 
18,862

 
187

 
3.97

 
22,734

 
229

 
4.03

 
57,432

 
483

 
3.36

Total loans
 
4,788,377

 
59,889

 
4.98

 
4,695,306

 
58,504

 
4.96

 
4,477,026

 
53,951

 
4.81

Mortgage-backed securities (d)
 
824,838

 
5,176

 
2.51

 
809,655

 
4,955

 
2.45

 
763,379

 
4,096

 
2.15

Investment securities (d)
 
162,258

 
1,124

 
4.12

 
168,526

 
1,139

 
4.08

 
200,517

 
1,212

 
3.49

Other interest-earning assets
 
33,389

 
367

 
4.40

 
36,992

 
412

 
4.46

 
36,418

 
433

 
4.76

Total interest-earning assets
 
5,808,862

 
66,556

 
4.60
%
 
5,710,479

 
65,010

 
4.57
%
 
5,477,340

 
59,692

 
4.39
%
Allowance for loan losses
 
(40,465
)
 
 
 
 
 
(40,831
)
 
 
 
 
 
(39,720
)
 
 
 
 
Cash and due from banks
 
136,542

 
 
 
 
 
118,056

 
 
 
 
 
127,583

 
 
 
 
Cash in non-owned ATMs
 
575,121

 
 
 
 
 
558,855

 
 
 
 
 
653,662

 
 
 
 
Bank owned life insurance
 
102,781

 
 
 
 
 
102,513

 
 
 
 
 
101,733

 
 
 
 
Other noninterest-earning assets
 
342,467

 
 
 
 
 
344,783

 
 
 
 
 
324,679

 
 
 
 
Total assets
 
$
6,925,308

 
 
 
 
 
$
6,793,855

 
 
 
 
 
$
6,645,277

 
 
 
 
Liabilities and Stockholders’ Equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand
 
$
1,017,068

 
$
781

 
0.30
%
 
$
939,239

 
$
606

 
0.26
%
 
$
925,853

 
$
331

 
0.14
%
Money market
 
1,345,702

 
1,375

 
0.41

 
1,324,946

 
1,227

 
0.37

 
1,273,868

 
968

 
0.30

Savings
 
554,028

 
262

 
0.19

 
564,275

 
264

 
0.19

 
548,669

 
220

 
0.16

Customer time deposits
 
597,111

 
1,467

 
0.97

 
555,668

 
1,188

 
0.85

 
577,834

 
934

 
0.64

Total interest-bearing customer deposits
 
3,513,909

 
3,885

 
0.44

 
3,384,128

 
3,285

 
0.39

 
3,326,224

 
2,453

 
0.29

Brokered deposits
 
243,441

 
741

 
1.21

 
195,073

 
577

 
1.17

 
148,127

 
234

 
0.63

Total interest-bearing deposits
 
3,757,350

 
4,626

 
0.49

 
3,579,201

 
3,862

 
0.43

 
3,474,351

 
2,687

 
0.31

FHLB of Pittsburgh advances
 
633,941

 
2,206

 
1.38

 
730,390

 
2,402

 
1.30

 
786,171

 
1,310

 
0.66

Trust preferred borrowings
 
67,011

 
522

 
3.09

 
67,011

 
500

 
2.96

 
67,011

 
439

 
2.61

Senior Debt
 
98,139

 
1,179

 
4.81

 
134,658

 
1,807

 
5.37

 
151,966

 
2,120

 
5.58

Other borrowed funds
 
122,313

 
298

 
0.97

 
132,030

 
310

 
0.93

 
133,037

 
182

 
0.54

Total interest-bearing liabilities
 
4,678,754

 
8,831

 
0.75
%
 
4,643,290

 
8,881

 
0.76
%
 
4,612,536

 
6,738

 
0.58
%
Noninterest-bearing demand deposits
 
1,414,356

 
 
 
 
 
1,333,266

 
 
 
 
 
1,271,373

 
 
 
 
Other noninterest-bearing liabilities
 
80,248

 
 
 
 
 
79,176

 
 
 
 
 
66,580

 
 
 
 
Stockholders’ equity
 
751,950

 
 
 
 
 
738,123

 
 
 
 
 
694,788

 
 
 
 
Total liabilities and stockholders’ equity
 
$
6,925,308

 
 
 
 
 
$
6,793,855

 
 
 
 
 
$
6,645,277

 
 
 
 
Excess of interest-earning assets over interest-bearing liabilities
 
$
1,130,108

 
 
 
 
 
$
1,067,189

 
 
 
 
 
$
864,804

 
 
 
 
Net interest and dividend income
 
 
 
$
57,725

 
 
 
 
 
$
56,129

 
 
 
 
 
$
52,954

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread
 
 
 
 
 
3.85
%
 
 
 
 
 
3.81
%
 
 
 
 
 
3.81
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
 
 
 
 
 
4.00
%
 
 
 
 
 
3.95
%
 
 
 
 
 
3.90
%
See “Notes”




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
20


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
 
(Dollars in thousands, except per share data)
 
Three months ended
 
Twelve months ended
Stock Information:
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
December 31, 2017
 
December 31, 2016
Market price of common stock:
 
 
 
 
 
 
 
 
 
 
High
 
$52.50
 
$49.45
 
$47.64
 
$52.50
 
$47.64
Low
 
45.75
 
42.45
 
31.90
 
42.45
 
26.40
Close
 
47.85
 
48.75
 
46.35
 
47.85
 
46.35
Book value per share of common stock
 
23.35
 
23.59
 
21.90
 
 
 
 
Tangible common book value per share of common stock (o)
 
17.35
 
17.57
 
15.80
 
 
 
 
Number of shares of common stock outstanding (000s)
 
31,418
 
31,410
 
31,390
 
 
 
 
Other Financial Data:
 
 
 
 
 
 
 
 
 
 
One-year repricing gap to total assets (k)
 
(0.80)%
 
(1.70)%
 
(4.14)%
 
 
 
 
Weighted average duration of the MBS portfolio
 
5.2 years
 
5.1 years
 
5.4 years
 
 
 
 
Unrealized (losses) gains on securities available for sale, net of taxes
 
$(6,401)
 
$(3,528)
 
$(8,194)
 
 
 
 
Number of Associates (FTEs) (m)
 
1,159
 
1,121
 
1,116
 
 
 
 
Number of offices (branches, LPO’s, operations centers, etc.)
 
76
 
77
 
77
 
 
 
 
Number of WSFS owned ATMs
 
440
 
447
 
446
 
 
 
 
Notes:
(a)
Annualized.
(b)
Computed on a fully tax-equivalent basis.
(c)
Noninterest expense divided by (tax-equivalent) net interest income and noninterest income.
(d)
Includes securities held to maturity (at amortized cost) and securities available for sale (at fair value).
(e)
Net of unearned income.
(f)
Net of allowance for loan losses.
(g)
Represents capital ratios of Wilmington Savings Fund Society, FSB and subsidiaries.
(h)
Accruing loans which are contractually past due 90 days or more as to principal or interest.
(i)
Excludes loans held for sale.
(j)
Nonperforming loans are included in average balance computations.
(k)
The difference between projected amounts of interest-sensitive assets and interest-sensitive liabilities repricing within one year divided by total assets, based on a current interest rate scenario.
(l)
Includes loans held for sale and reverse mortgages.
(m)
Includes seasonal Associates, when applicable.
(n)
Excludes reverse mortgage loans.
(o)
The Company uses non-GAAP (Generally Accepted Accounting Principles) financial information in its analysis of the Company’s performance. The Company’s management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented. The Company’s management believes that investors may use these non-GAAP measures to analyze the Company’s financial performance without the impact of unusual items or events that may obscure trends in the Company’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. For a reconciliation of these non-GAAP measures, see pages 21 and 22 of this press release.
(p)
Calculated for Wilmington Savings Fund Society, FSB.
(q)
Diluted earnings per share considers the impact of potentially dilutive shares except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. For the three months ended December 31, 2017, 884,982 shares were anti-dilutive and were not included in the diluted earnings per share calculation.                       




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
21


WSFS FINANCIAL CORPORATION    
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)
 
Non-GAAP Reconciliation (o):
 
Three months ended
 
Twelve months ended
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
December 31, 2017
 
December 31, 2016
Net interest income (GAAP)
 
$
57,725

 
$
56,129

 
$
52,954

 
$
221,271

 
$
193,745

Core net interest income (non-GAAP)
 
$
57,725

 
$
56,129

 
$
52,954

 
$
221,271

 
$
193,745

Noninterest Income (GAAP)
 
$
32,435

 
$
32,441

 
$
28,299

 
$
124,644

 
$
105,061

Less: Securities gains
 
220

 
736

 
479

 
1,984

 
2,369

Core fee income (non-GAAP)
 
$
32,215

 
$
31,705

 
$
27,820

 
$
122,660

 
$
102,692

Core net revenue (non-GAAP)
 
$
89,940

 
$
87,834

 
$
80,774

 
$
343,931

 
$
296,437

Core net revenue (non-GAAP)(tax-equivalent)
 
$
90,688

 
$
88,627

 
$
81,494

 
$
346,922

 
$
299,407

Noninterest expense (GAAP)
 
$
56,065

 
$
54,163

 
$
48,949

 
$
214,461

 
$
188,666

Less: Corporate development costs
 
21

 
153

 
1,526

 
878

 
8,529

Less: Debt extinguishment costs
 

 
695

 

 
695

 

Less: Fraud loss
 
2,844

 

 

 
2,844

 

Less: WSFS Foundation contribution
 
1,500

 

 

 
1,500

 

Core noninterest expense (non-GAAP)
 
$
51,700

 
$
53,315

 
$
47,423

 
$
208,544

 
$
180,137

Core efficiency ratio (c)
 
57.0
%
 
60.2
%
 
58.2
%
 
60.1
%
 
60.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
End of period
 
 
 
 
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
 
 
 
Total assets
 
$
6,997,020

 
$
6,875,344

 
$
6,765,270

 
 
 
 
Less: Goodwill and other intangible assets
 
188,444

 
189,116

 
191,247

 
 
 
 
Total tangible assets
 
$
6,808,576

 
$
6,686,228

 
$
6,574,023

 
 
 
 
Total stockholders’ equity
 
$
733,652

 
$
740,861

 
$
687,336

 
 
 
 
Less: Goodwill and other intangible assets
 
188,444

 
189,116

 
191,247

 
 
 
 
Total tangible common equity (non-GAAP)
 
$
545,208

 
$
551,745

 
$
496,089

 
 
 
 
Calculation of tangible common book value per share:
 
 
 
 
 
 
 
 
Book value per share (GAAP)
 
$
23.35

 
$
23.59

 
$
21.90

 
 
 
 
Tangible common book value per share (non-GAAP)
 
17.35

 
17.57

 
15.80

 
 
 
 
Calculation of tangible common equity to tangible assets:
 
 
 
 
 
 
 
 
Equity to asset ratio (GAAP)
 
10.49
%
 
10.78
%
 
10.16
%
 
 
 
 
Tangible common equity to tangible assets ratio (non-GAAP)
 
8.01

 
8.25

 
7.55

 
 
 
 





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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
22


 
 
Three months ended
 
Twelve months ended
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
December 31, 2017
 
December 31, 2016
GAAP net (loss) income
 
$
(525
)
 
$
20,569

 
$
18,110

 
$
59,551

 
$
64,080

Pre-tax adjustments: Securities gains, corporate development, debt extinguishment costs, fraud loss and WSFS Foundation contribution
 
4,145

 
112

 
1,047

 
3,933

 
6,160

Tax adjustments: DTA writedown & BOLI surrender
 
20,772

 

 

 
20,772

 

Tax impact of pre-tax adjustments
 
(1,485
)
 
(43
)
 
(315
)
 
(1,415
)